Tokyo Shares End Higher As Exporters, Real Estate Stocks Rise

5 Aug, 2010 - TOKYO (Dow Jones)--Tokyo stocks rose Thursday as a weaker yen lifted major exporters, while real estate stocks like Mitsubishi Estate and Mitsui Fudosan gained sharply after data showed a fall in closely watched Tokyo office vacancy rates.

The overall market opened stronger after U.S. data showed a bigger-than-expected increase in private-sector jobs last month. Investors are paying close attention to Friday's U.S. payroll data for clues on the future course of the nation's monetary policy. Depending on the data, speculation may grow that the Federal Reserve might take additional easing steps next week, which could cause the dollar to fall.

"Investors may not take large positions until the FOMC meeting on Tuesday as there is a risk that exporters may fall," said Tsuyoshi Kawata, senior strategist at Nikko Cordial Securities, adding that the Nikkei may remain between 9300 and 9800 for the next few days.

The Nikkei 225 Stock Average rose 164.58 points, or 1.7%, to 9653.92. The Topix index of all the Tokyo Stock Exchange First Section issues rose 11.16 points, or 1.3%, to 857.09, with all 33 Topix subindexes closing in positive territory.

Exporters gained, as the dollar traded above Y86 today. Sony gained 2.6% to Y2,715 and Fanuc added 3.7% to Y10,380.

Real estate stocks staged a rally on data showing a decline in office vacancy rates in central Tokyo for the first time in 2.5 years as of end-July. Mitsui Fudosan gained 5.7% to Y1,340 while Mitsubishi Estate rose 5.5% to Y1,277. The Topix real estate subindex led the board with a gain of 4.9%.

Toyota Motor, which released strong first-quarter results after the market close Wednesday, rose to an intraday high of Y3,195 before ending up 0.5% at Y3,105. Analysts credited the good earnings figures as mainly due to substantial profits in the firm's finance business, however, noting that the operating profit margin stood at just 4.3%, fairly low compared with Toyota's rivals.

By contrast, Isuzu Motors jumped 6.0% to Y264 after it swung to a net profit for the April-June quarter and doubled its full-year net profit outlook.

Asahi Breweries gained 2.0% to Y1,597 and Kirin Holdings added 1.5% to Y1,181 on a Nikkei report that they are ramping up beverage production amid the summer heatwave.

On the other hand, Renesas Electronics dropped 3.4% to Y704 after Goldman Sachs cut its rating to Neutral, saying fix cost reductions are expected to remain between Y20 billion to Y30 billion, short of the brokerage's expectation of between Y40 billion to Y50 billion. The brokerage said as the company's break-even point has blurred, it is difficult to draw a picture of profit recovery until sales growth is confirmed.

September Nikkei 225 futures closed up 130 points, or 1.4%, at 9620 on the Osaka Securities Exchange.

-By Ayai Tomisawa, Dow Jones Newswires, 813-6269-2793, ayai.tomisawa@dowjones.com
source: online.wsj.com